Just four months ago, Finland began to look at legislation which would give every one of their citizens 800 euros per month in an attempt to boost spending, and provide the ultimate answer to welfare reform. This idea was then quickly picked up by Switzerland in January of 2016 where the government placed a referendum set for June 5 to be voted on by the people which would appropriate the dollar equivalent of $2500 per month to each adult, and $750 for every child.
And now on March 7, Canada is joining in the movement as the province of Ontario is formulating a project which would hand out monthly checks under the guise of a ‘basic income’ to help boost their economy at a time when lower oil prices have devastated America’s neighbor to the North.
Besides government’s mulling over the idea of direct cash payments to citizens, these ideas of direct monetary handouts have also been on the drafting board of global central banksas a way to provide stimulus to economies at a time when deflation is forcing them to research unconventional programs such as negative interest rates and the banning of cash.
Ontario has announced it could soon be sending a monthly cheque to its residents as it plans to launch an experiment testing the basic income concept.
While officials in the Canadian province are yet to release any specific details of the project – including how much will be given to residents who participate – the finance ministry has published a report confirming the government’s intention to roll out the experiment.
The general concept of basic income involves a government handing out a flat-rate income to every single citizen within a country, either by replacing existing benefits or to top them up.
Proponents of the idea say it would save on welfare administration costs, reduce the poverty traps of traditional welfare states, be fair to people who have jobs, and give people more autonomy in general. -Independent.co.uk
Due to the devastating 18 month drop in global oil prices, Canada has been one of the hardest hit economies thanks in part to their high cost of oil production, and the fact that they must import a large number of products that also includes food. This has caused their currency to decline by more than 30% against the dollar, and has forced prices extremely higher where even a box of cereal now costs over 15 Canadian dollars ($10.50 U.S. dollars).
In most of the Western world, reliance upon direct government subsidies has skyrocketed following the 2008 Credit Crisis, with over 49 million Americans having to apply for food stamps, and over 100 million total receiving some form of government benefit. And with this newest economic slowdown that is for all intents and purposes a full fledged global recession, resource based economies are now having to pull out all the stops and consider unimaginable programs like paying everyone a government benefit to try to jump start the economy, and perhaps even head off potential civil unrest (see Arab Spring).